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GH2 $$ - Australian Hydrogen Funding Programs

Federal, State and Territory, including government agency funding, can be hard to keep track of in a rapidly evolving new energy industry such as hydrogen, particularly green hydrogen (GH2).  With the announcement of NSW’s Hydrogen Strategy on 13 October 2021, we take an in depth look into the relevant funding programs administered by the Federal, State and Territory Governments as well as the ARENA and CEFC funding arrangements. 

The GH2 train has well and truly left the station. Over the last few months, the flow of announcements regarding various GH2 projects has been thick and fast.  With Fortescue Future Industries’ Andrew “Twiggy” Forrest playing the GH2 field over the last few days, from announcing with the QLD Government the first world scale GH2 manufacturing centre – which will build 2GW worth of electrolysers, to standing alongside NSW Premier Dominic Perrottet as he announced his Government’s new Hydrogen Strategy, one could be forgiven for thinking we are witnessing a new type of NSW and QLD rivalry – the GH2 State of Origin. 

NSW’s Hydrogen Strategy

The NSW Hydrogen Strategy is backed by up to $3 billion worth of incentives to grow the hydrogen industry, particularly in the Illawarra and Hunter hydrogen hubs.  These incentives – which are hoped to attract between $50 and $80 billion worth of investment – include:

  • Exemptions for green hydrogen production from government charges;
  • A 90% exemption from electricity network charges for green hydrogen producers who connect to parts of the network with spare capacity;
  • Incentives for green hydrogen production; and
  • A hydrogen refuelling station network to be rolled out across the State.

The NSW Treasurer, Matt Kean, believes that this Hydrogen Strategy “is forecast to more than half the cost of green hydrogen production in NSW.”  If this forecast proves to be accurate this will bring GH2 closer to cost parity with fossil fuel produced forms of hydrogen, unlocking the demand side of the GH2 market and turbo charging the large-scale production of GH2.

GH2 funding landscape

Like its predecessors, wind and solar, government dollars whether they be grants, loans or incentives, such as the NSW Hydrogen Strategy, will play an integral role in the development of the budding GH2 to the industry in Australia as we aim to scale up GH2 production and tap into various export opportunities. The New Energy team at Hamilton Locke has reviewed the various funding programs and incentives at all levels of government and distilled the key features of each program in the below table.  Also set out in the below table are the various projects awarded under each program.  While many of the programs are currently closed, it will be important for GH2 project developers to track the relevant programs (particularly the various eligibility and merit criteria) to allow them to tap into the government dollars when the programs inevitably re-open for applications.

Hydrogen 1

Hydrogen 2

Hydrogen 3Hydrogen 4

Hydrogen 5

Hydrogen 6

Hydrogen 7

Hydrogen 8

Hydrogen 9

Hydrogen 10Hydrogen 11

Government funding will be a crucial component in any GH2 project.  It is important that project developers do not “self-select” themselves out of funding programs.  Therefore, we strongly recommend project developers seek out professional advisors to help assess their GH2 project’s suitability under the relevant funding program.  We at Hamilton Locke are already engaged with our clients in relation to these programs and we will be assisting in preparing applications to all levels of government in the coming months and years. Please get in touch with our New Energy lead, Matt Baumgurtel, should you wish to discuss.

The Hamilton Locke team advises across the energy project life cycle – from project development, grid connection, financing, construction, including the buying and selling of development and operating projects.

Matt Baumgurtel leads the New Energy sector team at Hamilton Locke which specialises in renewable energy, energy storage and hydrogen projects and transactions as part of the firms Energy, Infrastructure and Resources practice.

Andrew Smith is a lawyer in the Hamilton Locke Energy Infrastructure and Resources team and specialises in renewable energy projects including wind, solar, energy storage and hydrogen.